What does digital maturity mean to procurement?

October 18th, 2018

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Purchasing departments are already on the road to digital transformation and procurement officers seem confident that it can really benefit their company. By comparing data from various reports, it seems that two areas are of particular interest: Artificial Intelligence with analytics and Robotic Process Automation (RPA) with the automation of low.

Artificial Intelligence and analytics

Artificial Intelligence has aroused the interest of procurement officers with its ability to facilitate or even simulate human decision-making by analysing quantities of data and generating assumptions, with a better cost-effectiveness ratio. Procurement officers see this technology as an opportunity to increase efficiency, make decisions and determine their strategy in a quicker and more relevant manner.

According to the study led by Forrester[1], 13% of procurement officers use Artificial Intelligence on a large scale, while 49% use it in moderation. This trend is likely to continue as 55% of company directors want to keep investing in Artificial Intelligence for procurement over the next two years.

Procurement decision makers are already convinced about using Artificial Intelligence for analytical purposes. Furthermore, it is considered to be the technology that will have the most impact on procurement over the next two years, according to the report by Deloitte[2].

Generally, the procurement industry plans to use data analysis to optimise its performance and in particular to:

Optimise its costs

Improve the efficiency of its processes

Generate reports

Improve operations

Automating tasks with RPA

Robotic Process Automation (RPA) is described by Deloitte Consulting as "[a solution that can] process any input data by running a series of pre-programmed actions, like a macro, and following predefined business rules." »

The procurement industry hopes to use this technology for repetitive or low value tasks. At present, RPA is not as widely used as Artificial Intelligence. However, according to the study carried out by SAP Ariba and the University of Applied Sciences Würzburg-Schweinfurt, there is still a strong desire to benefit from it[3]:

Only 5% of respondents currently have highly automated systems or processes at their disposal.

However, 63% of respondents think that automation is an important topic and have added it to their roadmap.

However, the previously mentioned report, published by Deloitte, allows us to put these figures in perspective based on the processes involved. While payments, purchasing requests and orders are automated by nearly a quarter of purchasing departments, it is true that other processes, such as supplier management and risks, currently remain largely untouched by this technology.

Ultimately, the future of procurement is bright. Over time, both analytics and automation will allow purchasing departments to concentrate on high value tasks, strategic decision-making and relationships, with either internal customers or suppliers and partners.